More Asian governments are putting prices on emissions to try and curb global warming, but the region’s carbon markets and taxes are mostly off to slow and disappointing starts.
Carbon prices in China and South Korea are at just fractions of where they are in the European Union and also well below levels estimated to have a meaningful impact on the climate, while taxes in Japan and Singapore have been set at very low levels. That suggests these markets — at least at their current trajectories — aren’t going to be sufficient to change the behavior of polluting industries or help countries reach their net zero goals.
Asia is struggling to adopt ambitious pollution pricing instruments, especially at a time of soaring inflation, rising energy prices and economic instability. Carbon pricing is one of the most powerful tools to put economies on low-emission paths, but price signals must be sustained, strengthened, and extended to a greater portion of global emissions, the World Bank said in May.